Anger: A protestor outside the parliament building in Nicosia where the president and minsters are meeting to discuss possible alterations to the deal

Nicos Anastasiades, the Cyprus President, held late-night talks with Angela Merkel, the German Chancellor and Russian president Vladimir Putin over the proposed raid on bank accounts.

The House of Representatives is due to meet at 4 pm GMT after the vote, originally planned for Sunday, was postponed twice.

But government spokesman Christos Stylianides told national radio: 'It looks like it won’t pass.'

It comes after three days of turmoil over the stricken island. Last night, as the crisis worsened, the Treasury
also announced it is freezing pensions to Britons in Cyprus while the
details of the tax grab are finalised.

Elderly expats won’t get any
money until at least Thursday when Cypriot banks are due to reopen –
and thousands may have to change their bank account to try to dodge
the tax raid.

Suspended: Treasury Minister Greg Clark said that pension payments to expats living in Cyprus had been suspended until the island's parliament voted on a controversial levy on bank deposits

Under the plans, Cyprus is getting a
£8.7billion bailout but Germany will not fund the deal unless every
account holder pays a 6.75 per cent tax, with a 9.9 per cent raid on
those with more than 100,000 euro (around £85,000).

On a day of fresh drama yesterday:

Panic spread as it was revealed Cypriot banks will be closed for three more days

Stock markets fell around the world and around 0.4 per cent was wiped off the value of the euro

A vote on the tax grab in Cyprus was delayed until today

The Cypriot government suggested
deposits below 100,000 euro being hit with just a 3 per cent tax, rising
to 15 per cent for those above 500,000 euro (£430,000)

Last night a spokesman for the eurozone also hinted that all depositors with less than 100,000 euro could be protected

In all, up to 60,000 Britons on the island are set to lose out.

But it was the volte-face on the 3,000 troops that angered MPs at Westminster.

At the weekend, Mr Osborne said: ‘For
people serving in our military and our government out in Cyprus, we are
going to compensate anyone affected by this bank tax.’

Yesterday the Treasury refused to say that all their losses would be compensated for.

A Treasury spokesman said: ‘We will
compensate on reasonable losses – whether they are from current or
savings accounts – if they are a result of serving in Cyprus.’

Despair: Traders in London react this morning as markets struggled in light of the decision by eurozone leaders to part-fund a bailout of Cyprus by taxing bank deposits

MoD sources said that would not cover
‘speculative investments’ and instances where troops had moved funds to
Cyprus because they want to buy property or retire there.

Labour MP Kate Hoey said British expats were ‘having their money stolen on the orders of the German government’.

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Shadow Armed Forces minister Kevan
Jones said: ‘It is absolutely vital that no member of our Armed Forces
is out of pocket. Repayments and compensation from government must cover
all losses.

Uncertainty: The news has sent shockwaves throughout world markets, with European bank shares falling by more than two per cent

Blame: A police officer stands in front of a bus station where an anti-bailout banner blames German Chancellor Angela Merkel for stealing 'life savings'

Anything less would be seen as betrayal across the military community and throughout the country.’
There are around 18,000 Britons of pensionable age in Cyprus, of whom around 12,000 claim a UK pension.

In a tense Commons debate, Treasury
Minister Greg Clark announced that pension payments to the island are
being frozen so the money doesn’t end up in accounts that might be
raided.

‘Any UK pensioners in Cyprus can be
assured that their future pension payments are being held safely and a
normal payment service will resume as soon as the situation in Cyprus
becomes clear,’ he said.

Talks: Cypriot President Nicos Anastasiades (left) and President of the Parliament Yiannakis Omirou (right) who are discussing possible amendments to the bailout deal

Under pressure: Cyprus President Nicos Anastasiades arrives at the presidential palace in today

But not all pensioners are likely to go online and ‘switch the bank account to which payments are made’ as Mr Clark urged.

Mr Clark said that they should
contact the International Pension Centre through the Department for Work
and Pensions website ‘as soon as possible’ for details of how to switch
the bank account that they use to receive their cash.

Frozen pension payments will be reviewed when there is a deal in Cyprus.

A statement from eurozone finance ministers yesterday urged Cyprus to alter the terms of its levy in order to exempt smaller savers and shift the burden onto accounts above €100,000.

'Small depositors should be treated differently from large depositors,' the statement said as it suggested that the principle of protecting deposits below six figures should not be breached.

Criticism: Russia's President Vladimir Putin said the levy was 'unsafe, unprofessional and dangerous'

Withdraw: The news of a levy on bank deposits caused panic on Saturday evening as Cypriots rushed to withdraw money from banks

Last night Cypriot President Nicos
Anastasiades phoned European Economic and Monetary Affairs Commissioner
Olli Rehn to warn him that there might not be enough support for the
deposit tax to pass in Parliament.

He is reported to have told Mr Rehn:
‘When I warned you that there would not be a parliamentary majority to
pass the agreement, you didn’t want to listen. Give my regards to Mrs
Merkel.’

Expats living in Cyprus yesterday
told Mrs Merkel to keep her ‘hands off’ their money. Almost all cash
machines on the island have been drained meaning Britons have been
forced to borrow from friends or use credit cards.

Former Tory Defence Minister Sir
Gerald Howarth said: ‘Most service personnel would have invested in
British banks but some may have invested locally with a view to retiring
in Cyprus. Unless they were warned that they shouldn’t invest in local
banks, this is an example of where the military covenant should be
invoked.’

Tory MP Patrick Mercer, a former
colonel, said: ‘There can be no question that if Her Majesty has asked
her troops to serve overseas in Cyprus then the Government must protect
their financial wellbeing.

'I’m sure they can pay for it the
generals take a pay cut for a couple of days or sack the latest soft
furnishings refurbishment officer in the MoD.’

Fears: The developments in Cyprus have prompted fresh concerns that the eurozone could break up

Risk map: Most of the nations at 'extreme' risk from a eurozone collapse are in Europe but some are in Africa

Daylight robbery! Expats blast the 'bullies in Brussels'

They arrived in Cyprus dreaming of a carefree life in the Mediterranean sunshine.

But last night these expats were left in a state of anxiety after their Cypriot current and savings accounts were frozen in the EU raid.

They said they felt ‘trapped’, and blasted the move as ‘daylight robbery’.

Since the banks closed on Friday they have been unable to access their money either via cash machines or online. Some could lose thousands in hard-earned euros.

Even those who might lose a more modest amount are worried it could happen again and plan to close their accounts permanently when the banks open again, possibly on Thursday.

At a lively meeting in a coffee shop in the village of Pyrgos, they spoke of their anger at Germany and the European Union, who they blame for the unprecedented bank tax.

These expats were left in a state of anxiety after their Cypriot current and savings accounts were frozen in the EU raid. Since the banks closed on Friday they have been unable to access their money either via cash machines or online. Some could lose thousands

1 The bingo winner

Cath Bradbury, 61, from Littleborough, Lancashire organised the meeting. She has had a house on the island for ten years and moved there permanently last year.

The cash machines in Cyprus are mainly empty but Cath was lucky that a bingo win last week meant she had some cash in her purse.

She could lose hundreds of euros from her Cypriot current account. Mrs Bradbury said: ‘We’ve worked all our lives to come here, sometimes with three or four jobs at a time. We sold our home and bought here putting money into the Cypriot economy.

‘But now I feel ripped off, cheated and bullied. Not by Cyprus but by Brussels and the Germans. It is all so Angela Merkel can win her election in September. Europe needs to be warned that if they do this here they will be able to do it anywhere.’

2 The programmer

Computer expert Roger Varley, 56, from Kent is set to lose up to 2,000 euros in his savings and current account after moving to Cyprus six years ago when he was made redundant.

He said: ‘I am not old enough to retire so I work out here, I pay taxes and contribute to the economy. My wages go straight into my current account but because of the time of the month that the account was frozen I won’t lose as much as I could have done. It could have been much worse.’

3 The accounts worker

Pat Sharman, 71, a former accounts worker from London has lived in Cyprus for 12 years and is set to lose 5,000 euros from her savings.

She said: ‘This is daylight robbery there is no other way to describe it. Merkel has justified this to her own people by saying the people who are responsible for this mess should pay for it. But we are not responsible for the banks, we have worked hard all our lives and paid our taxes.

'I have worked since I was 15, at times I have had four jobs so that we could eventually sell our house and come here. I’m furious that hard working people living on this tiny island have been targeted in this way.’

4 The former engineer

David Sharman, 71, is Pat’s husband. He said: ‘We have sold our homes and invested in this island, we have put money in the economy. It is wrong that we are being punished.

5 The widow

Christina Allbeson, 66, from Oldham, has been forced to borrow from friends after her current account that her state pension is paid into was frozen.

She moved to Cyprus with her husband Rodney ten years ago but he died of a heart attack after two years.

She said: ‘I have been surviving on my pension and things get harder every year. I need my pension to pay for everything. I am down to what is left in my freezer to eat.’

6 The cattery owner

Walter Litherland, 67, a former civil engineer from Liverpool runs a cattery on the island with wife Teresa and is set to lose money from his current account.

7 The nurse

Cilla Rowland, 65, a former nurse from Taunton, Somerset, moved to Cyprus to retire with her sister Delise five years ago.

She will lose 500 euros and plans to withdraw all her savings.

She said: ‘I started work at 15 and spent more than 40 years in nursing to be able to afford to move out here and retire. We are not extravagant and don’t spend a lot. We live off our pensions and losing 500 euros will hit us hard. As soon as the banks are allowed to open I will be closing my account.’

8 Closing his account

Stewart Bradbury, 64, from Littleborough, Lancashire had put £1,000 into his bank current account to buy a new shotgun. He could lose up to 100 euros.

He said: ‘It is outrageous that we are going to lose money because of an edict from Brussels dictated by the German chancellor.

'The biggest economy in the EU is bullying one of the smallest and the victims are people who have worked all their lives and are surviving on pensions. We will be closing our accounts.’

9 The housewife

Carol Jones, 67, a housewife from Birmingham has lived in Pyrgos for five years and can’t access her money from her current account. 10 the importer

Tony Mooney, 49, from Wembley, moved to the island ten years ago and runs a business importing alcohol to sell to local bars.

He was due to pay for a big order and is set to lose 15,000 euros. He said: ‘This is theft, pure and simple. I work hard all year and pay my taxes, now they are putting my business at risk.’

11 The animal lover

Walter Litherland’s wife Teresa, 60, said: ‘What worries me is that as the people on the island suffer more we are going to see an increase in the number of animals being abandoned.

‘We are already seeing more cats being abandoned and brought to us. People are really starting to suffer financially.’

12 The traveller

Chris Pook, 71, from East Grinstead travelled before settling in Cyprus several years ago, he can’t access his account

13. Locked out

June Burton, 60, who moved to the island several years ago, says she feels desperate after being locked out of her current account.